FutureStructure

American Business Deeply Divided Over Climate Change

Many leading companies endorse efforts to reverse climate change and are stepping forward voluntarily, yet many industry trade groups don’t accept the science and oppose mandatory changes.

by Mitchell Schnurman, The Dallas Morning News / August 5, 2015
Google is one of many leading companies that endorse efforts to reverse climate change. Flickr/Denis Cappellin
(TNS) — Everyone has a stake in the environment, but American business is deeply divided over what comes next.

Many leading companies endorse efforts to reverse climate change and are stepping forward voluntarily. Last week, Apple, Google, Goldman Sachs and Wal-Mart were among 13 market leaders that pledged to invest at least $140 billion in low-carbon initiatives. An additional 365 companies signed letters of support for the Environmental Protection Agency’s clean power plan released Monday.

“Our support is firmly grounded in economic reality,” said the letter sent to 29 governors.

Yet many industry trade groups don’t accept the science and oppose mandatory changes. The U.S. Chamber of Commerce called the clean power plan “a bad deal for America.”

It’s among several groups and states that plan to sue the government. Opponents say the new emission rules would drive up electricity prices, harm coal and other industries, and hurt national competitiveness.

“We believe in free markets and voluntary actions,” said Stephen Minick, vice president of governmental affairs for the Texas Association of Business, which represents over 4,000 employers. “We shouldn’t be modifying our energy economy in a way that’s gonna cost people a lot more money.”

Business isn’t a monolith, so it may be natural that companies fall on opposing sides of the issue. In Minick’s view, the debate is more personal than ideological — as in how much is this going to hurt me?

Some companies, such as Apple and Google, can afford to go green and boost their public image in the process. Others, such as Goldman Sachs, see a business opportunity in the shift to cleaner power, he said.

ENERGY A LOW PRIORITY

But among his group members, the top concern is having enough money for advertising, improving productivity and new hires. Energy efficiency is often far down the list.

“They’re worried about keeping up with the competition,” Minick said.

Corporate volunteers alone can’t change the arc of climate change, many experts believe. Last week, oilman T. Boone Pickens called that notion a joke. The speed and scale of the problem is so great that government has to require contributions from everyone — and must lobby other countries, too.

But the EPA will face years of resistance and legal fights over the power plan. And the next president and Congress could undermine President Barack Obama’s climate-change agenda. So a combination of business-led initiatives and regulation may work best.

“We believe economic prosperity and environmental responsibility go hand in hand,” said Ben Ratner, senior manager of the Environmental Defense Fund.

The group often partners with industry to promote changes, and it’s part of an initiative to reduce methane emissions in oil and gas fields. Last week, Statoil, an international firm based in Norway, joined the project to develop technology to cut the potent greenhouse gas.

Anadarko, Apache Corp., BG Group, Hess Corp., Noble Energy, Shell and Southwestern Energy are the other industry partners, EDF said. The goal is to have pilot projects and testing underway by the end of the year. If the technology helps companies save money and improve the environment, it could be widely adopted.

For Minick, this is an ideal approach to an environmental challenge. “It may not be economical yet, so they’re voluntarily investing,” he said of the participants.

FOUR R’S

But the specter of regulation is a factor, too. To make the business case for investing in the methane project, Ratner focuses on what he calls the four R’s.

Revenue can get a bump from capturing more methane at the well. Reputations can rise if a company is seen as a solid, responsible operator. Risks can be reduced by cutting large methane leaks that pose a safety hazard.

Regulation is the final lever. In January, Obama set a goal of cutting methane emissions by at least 40 percent by 2025. Methane has become a bigger threat as shale plays produce more oil and gas, and draft regulations are expected soon.

“Forward-leaning, smart operators realize that it’s only a matter of time before methane is regulated,” Ratner said. “If they can help pioneer technologies that are better, faster and cheaper, that’s in their best interests.”

In 2000, EDF partnered with FedEx on a hybrid truck to reduce emissions and boost efficiency. At the time, there was just one hybrid truck model on the road. Today, there are nearly 40 models, the group said, and FedEx has over 1,800 alternative energy vehicles.

It’s great that some companies are willing to take the lead with lofty goals of what’s possible. But addressing climate change demands more: “We need a basic floor,” Ratner said.

That’s the only way to ensure that better practices will be adopted by thousands of operators, not just a handful of leaders.

©2015 Dallas Morning News, Distributed by Tribune Content Agency, LLC.